Semiconductor shortages have dominated headlines in the business world this year. Manufacturers of consumer goods across the globe are struggling to meet their production targets because they can’t get their hands on enough computer chips.
New cars are one enormous source of demand for semiconductors, especially with the growth of electric vehicles, and dealer lots are currently running on a fraction of the inventory they need to meet demand.
The issue has pushed consumers into the used car market, sending prices soaring 24.4% on average over the last 12 months. But semiconductor-service powerhouse Cohu (NASDAQ:COHU) is helping to alleviate these supply pressures, and it just delivered another big quarterly result. Here’s how.
Automotive chips continue driving Cohu forward
Cohu provides testing and handling equipment to the world’s largest semiconductor producers, assisting in the manufacture of computer chips for a range of applications including consumer electronics, mobility, and even the automotive market.
That segment has grown to become the company’s largest, accounting for 20% of total revenue in the third quarter just announced, up from 18% in the second quarter. It highlights persistent demand from semiconductor producers that need to expand manufacturing capacity in preparation for a future consisting of smarter, more feature-heavy vehicles.
But it also displays Cohu’s clever strategic focus, pivoting its attention to where it’s needed most right now, which is helping producers clear order backlogs and relieve shortages.
Its Neon inspection and high-speed handling systems are designed to rapidly inspect computer chips as small as 0.2 millimeters by 0.4 millimeters, which are often used in automotive applications. These fragile components require delicate yet fast handling, so defects can be detected in efficient time frames so as not to hold up the production process.
Cohu’s portfolio of automotive-related semiconductor equipment also extends to real-world-style environmental testing to ensure chips can withstand the stresses of everyday use. It also offers the capability to test and handle chips for new technologies like autonomous driving and broad electrification, which should play a significant role in the future of the automotive industry.
Strong third-quarter results
Cohu delivered 49% year-over-year revenue growth and 159% year-over-year earnings per share growth in the third quarter. Its $0.70 in third-quarter EPS adds to what is expected to be the company’s first…
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